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TMI Blog2021 (3) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... Bogus purchases - added back the profit element embedded in such purchases by estimating it @ 25% - Considering the fact that the disputed goods purchased by the assessee is steel, wherein, as per industry norms, the profit rate varies between 5% and 8% and further, the fact that the assessee has paid applicable VAT on such purchases to the Sales Tax Authorities because of the default made by the selling dealers, disallowance @ 8% of the alleged non genuine purchases would be fair and reasonable. Accordingly, direct the Assessing Officer to restrict the disallowance to 8% of the non genuine purchases. The grounds raised by the assessee are partly allowed. - ITA No.4191/Mum./2019 (Assessment Year : 2009–10) - - - Dated:- 28-1-2021 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties have been found to be providing accommodation bills. On the basis of such information, the Assessing Officer re opened the assessment under section 147 of the Act. During the assessment proceedings, the Assessing Officer called upon the assessee to prove the genuineness of purchases. Further, to independently verify the genuineness of such purchases, the Assessing Officer issued notices under section 133(6) of the Act to the selling dealers. However, the notices issued returned back un served. Therefore, the Assessing Officer was of the view that purchases are non genuine. However, considering the fact that the assessee has effected sales he concluded that the goods must have been purchased from grey market by suppressed profit. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d received specific information from the Sales Tax Department that certain purchases claimed to have been made by the assessee during the year are non genuine. Therefore, the Assessing Officer has tangible material in his possession to form a belief regarding escapement of income. Mentioning of a wrong figure in the reasons recorded, therefore, would not invalidate the proceeding. Therefore, I uphold the validity of re opening of assessment under section 147 of the Act. As regards the merits of the issue, the assessment order itself reveals that the Assessing Officer accepts the fact that as against the purchases made, the assessee has effected corresponding sales. Therefore, he has only doubted the source of purchases, hence, has added bac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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